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|James Christopher, president of TM Insight Asia|
With a population of over 4.4 billion and fragmented supply chain networks, we recognised a significant opportunity for us to help our customers build a stronger and more efficient supply chain in Asia.
Our focus markets in the region are Singapore, Indonesia, Malaysia, Vietnam and Thailand – markets which form critical links in the supply of goods not only across the region but globally, and have opportunities for further development and growth.
XAct Solutions has a presence in Australia and across Asia with a team of over 50 specialists who have designed and delivered supply chain transformations across the Asia-Pacific region. By joining forces, TM Insight will have access to XAct Solutions’ strong in-house supply chain expertise and its presence in Vietnam, Thailand, and Japan.
The acquisition will also see TM Insight’s team and revenue double in size and firmly secures its position as the largest independent supply chain and property consultancy across the Asia-Pacific region.
Discussions to finalise the acquisition deal took about six months.
TM Insight has always respected XAct Solutions’ approach in business and both our businesses are complementary in nature. XAct Solutions have strong in-house supply chain expertise and a presence in Vietnam, Thailand, and Japan, whereas TM Insight have a strong integrated offering in supply chain, property and project management.
By joining forces, we become a powerful consultancy with a balanced capability across Australia and will be better equipped to service our clients and expand into Asia as a joint venture.
As we look to expand in the region, Vietnam was identified as a key focus market because it is one of the fastest-growing markets in Southeast Asia and had the region’s highest increase of the global market share in the past five years in manufacturing.
Vietnam is also one of the most promising e-commerce players in the region, driven by its young population, growing middle-class, as well as high internet and smartphone penetration. At a time when supply chains have never been more challenged with global restrictions and the acceleration in e-commerce, we see a big opportunity in Vietnam.
|XAct Solutions Vietnam warehouse project|
Many businesses are today considering a shift from supply chains in China in a bid to diversify their supply chains, and Vietnam is a natural candidate to lessen this dependency on one country. With the pandemic, we have also seen changing consumer demands and behaviours with the rise of ecommerce.
With these, we see the opportunity for TM Insight to work with businesses to transform and future-proof their supply chains to enable them to meet new trends and demands.
For example, we are seeing a trend towards e-commerce in Vietnam – in 2018, e-commerce in the country grew 30 per cent to reach a new high of about $8 billion, a higher growth rate than that of Thailand and Malaysia in the same year. With the growth of e-commerce players like Sendo in Vietnam, there is an accelerated drive towards optimising supply chains to accommodate the digital economy. Our core expertise of supply chain optimisation and industrial property development will serve as an advantage here.
As businesses recover from the impact of COVID-19, supply chains will become smarter and more automated, and businesses need to jump onto this bandwagon to better meet consumer demands and behaviour change to remain competitive and relevant.
With regards to this, some of the solutions with which we will support businesses in Vietnam can include working with them to diversify sourcing. Diversification mitigates supply challenges and provides the safety net that businesses need to ensure that they can receive the goods their consumers need regardless of the circumstances in certain geographies. With Vietnam now becoming a location of choice for businesses seeking manufacturing capabilities outside of China, we see the opportunity to work with businesses here to leverage this situation.
With social distancing across all environments likely to prevail for some time, we also see the opportunity to work with businesses to look into how they can repurpose underutilised retail spaces into micro-fulfilment centres to see distribution move to urban areas and making delivery times even faster.
Oscar Perez, managing director Vietnam, XAct Solutions
The mix of XAct’s supply chain strength as specialists in this space with TM Insight’s specialisation in property development and project management gives us a unique position across the Asia-Pacific market. We are not only able to design and build distribution centres and factories, we can also design the processes, systems and organisational capabilities to run these operations. All this led by people who are industry experts, transformation experts, and are culturally diverse.
With our already established five years of presence in Vietnam and significant customer base which includes some of the biggest companies in Vietnam, we are now stronger after the merger by being able to increase our portfolio of offerings and increased skills and consultant base. This is something that we have not been able to do until now.